IMF sounds alarm on ballooning US national debt: 'Something will have to give'

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Congressional Budget Office director Phillip Swagel analyzes where lawmakers stand to slow down debt growth.

The astronomical rise in the U.S. national debt poses «significant risks» to the global economy and threatens to continue fueling high inflation, according to a new warning from the International Monetary Fund.

In its latest Fiscal Monitor, the Washington-based institution said that it expects the U.S. to record a fiscal deficit of 7.1% in 2025 – more than triple the level in other advanced economies. 

«Loose fiscal policy in the United States exerts upward pressure on global interest rates and the dollar,» Vitor Gaspar, director of the IMF’s fiscal affairs department, told reporters. «It pushes up funding costs in the rest of the world, thereby exacerbating existing fragilities and risks.»

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The Capitol Building in Washington, DC, US, on Wednesday, Jan. 17, 2024. (Photographer: Julia Nikhinson/Bloomberg via Getty Images / Getty Images)

Under current policies, public debt in the U.S. is projected to nearly double by 2053. The IMF identified «large fiscal slippages» in the U.S. in 2023, with government spending surpassing revenue by 8.8% of GDP – a 4.1% increase from the previous year, despite strong economic growth.

If this trend continues, the Congressional Budget Office anticipates the national debt will grow to an astonishing $54 trillion in the next decade. Higher interest rates are also compounding the pain of higher debt.

Should that debt materialize, it could risk America's economic standing in the world.

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The U.S. is one of four countries